I've been running arch on a VPS for years now, never had any serious problems until this:

When I updated systemd from 204-3 to 208-10, the VPS stopped booting.I was able to downgrade systemd and systemd-sysvcompat to 204-3 and the VPS rebooted normally.This is starting to become a problem because since I upgraded dbus (1.6.18-1 -> 1.6.18-3), my syslog is empty.On top of that I've had to keep libgcrypt <= 1.5.3-1 because otherwise systemd 204 doesn't work any more.I would like to fix this before any more problems pile up.

You're only going to run into problems running arch userspace on a kernel that old. There's more to come in the Near Future™ that will make such aging kernels even more incompatible with recent userspace.

I don't know the exact kernel version that require. But just as an example, the previous linux-lts kernel (3.0.y) began to silently break in strange ways probably almost a year ago. I suspect that our current LTS may be incompatible with Arch userspace by the end of 2014, but this will likely be a more noticeable breakage.

I can't really recommend running anything other than the current kernel in [core].

Thanks for the replies. What I'm getting from this is that since a lot of virtualization environments run on old kernels (OpenVZ is based on RHEL 6 for example) there is no hope for running Arch on a VPS anymore? I'll go and warn people on the wiki page then. I think we can mark this topic as closed.

My main problem was that systemd > 204 did not boot on my VPS and the other packages can't handle such an old version of systemd any more. There may be more recent versions of these that still work and I know this isn't ideal so don't attempt this unless you really want this unstable setup. If anyone has managed to run this setup successfully without having to keep those outdated versions around let me know.

Also I do know that switching to a VM-based provider (instead of container-based) would solve this but I really like my current provider and they only support OpenVZ.

Currently on latest stable OpenVZ kernel 2.6.32-042stab085.20 Arch Linux works fine, only you can't use systemd-212 as it uses kernel features which aren't available in OpenVZ kernel.So upgrade systemd to latest systemd 211 and then blacklist it with IgnorePkg in /etc/pacman.conf

@davispuh good one reporting the bug, i didnt manage to sit down long enough to isolate the error, CC'd myself to it.

The moment this is fixed, I'm going to make another Arch OpenVZ image for openvz.org, been quite a while since I've seen a need in updating the image, but making one while on the new kernel will give me a chance to ensure there is no other issues with new systemd features.